WASHINGTON DC—The Philippines has called on the World Bank and the International Monetary Fund (IMF) to adopt bold, out-of-the box solutions in support of their efforts toward a “new multilateralism” to effectively assist emerging economies in mitigating, if not reversing, the impact of a changing global economic landscape fraught with trade tensions, protectionism and other factors that imperil global growth.

On behalf of the Philippine government, Finance Secretary Carlos Dominguez III also urged the two institutions to remain supportive of high-impact reforms to improve the mobilization of domestic resources in developing countries that aim to sustain and boost long-term growth prospects, and increase resilience to economic shocks.

Dominguez said the IMF and the World Bank should likewise work closely with regional multilateral institutions, which possess a more profound understanding and appreciation of the socio-economic and cultural backgrounds of countries seeking their assistance, and hence, their development needs.

Besides trade tensions and protectionism, Dominguez also cited the rise of negative interest rate policies, and the increasingly debilitating effects of climate change and disruptive technologies as among the uncertainties that now place the world’s economic growth at risk.

“We fear that the traditional tools we have used to address such issues might prove insufficient, especially in dealing with disruptions in business models brought about by technologies, trade war, and changes in the supply chain models,” said Dominguez in his statement during the 102nd meeting of the ministers and governors of the Intergovernmental Group of 24 (G-24) at the IMF headquarters here last Thursday.

“We call on the IMF and the World Bank to re-examine the traditional interventions and discard those that no longer work in favor of bold, out-of-the box solutions for the institutions to remain in the foreground of the global economic landscape. This should underpin the concept of the ‘new multilateralism’,” he added.

The term “new multilateralism” was coined by former IMF Managing Director Christine Lagarde, who defined it as a new form of international cooperation that is “more inclusive, more people-centered, and more results-oriented.”

In his statement, Dominguez also expressed deep concern over the reality that an estimated 47 percent of low-income developing countries are now in debt distress, with development aid across the globe having dropped by 2.7 percent last year and bilateral official development assistance (ODA) to the least-developed countries falling by 3 percent.

He viewed these circumstances with unease, especially because ODA make up two-thirds of the external financing for countries that are most in need of such assistance.

“We also feel compelled to state that the objectives of development assistance should not hover around neo-colonialist tendencies. International cooperation is a means toward shared prosperity, not the subjugation of vulnerable economies,” Dominguez stressed.

Dominguez, who sits as the governor for the Philippines in the board of governors of the World Bank, spoke right after World Bank President David Malpass and IMF Managing Director Kristalina Georgieva delivered their respective statements at the meeting. Julio Velarde Flores, who is chairman of the G-24 and Governor of the Central Reserve Bank of Peru, delivered the opening statement.

In the Philippines, Dominguez said the Department of Finance (DOF) and the Central Bank (Bangko Sentral ng Pilipinas) have cooperated well in ensuring fiscal discipline, as they are well aware that the stability of the international monetary system rests on each member-economy doing its best to ensure its own economic fundamentals are sound and its external position is strong

Such cooperative efforts have led to robust revenue flows, historic high international reserves, a credit rating upgrade, a declining debt-to-GDP (gross domestic product) ratio, and “substantial progress” in reforming the Philippines’ tax system, modernizing the country’s infrastructure and further liberalizing its economy, Dominguez noted.

As a result, the Philippines is expected to achieve upper middle-income economy status next year, way ahead of schedule, he said.

But like most countries, Dominguez said, the Philippines also finds itself in much uncertainty because of developments that are projected to lead to a slowdown in global growth, which, in turn, will adversely affect low-income and emerging economies.

“If present trends continue, all the work we have put in preparing our economies for competitive trade, improving our domestic efficiency, and maintaining the highest standards for fiscal discipline will fail to ensure inclusive growth,” Dominguez said. “Nothing threatens peace and stability more than economic stagnation, especially one inflicted by growing hostility to free trade.”

“We have now reached a critical threshold. Beyond this point, we fear seeing a world thrown into economic decline,” he added.

Dominguez urged the IMF and World Bank to help emerging economies in “mitigating, if not reversing” the factors that could undermine prospects for global growth.

“The interaction between international institutions and national governments with pivotal junctures throughout history must be adaptive and strong-willed,” he said.

Dominguez said that under “the commendable leadership” of the World Bank snd IMF, their institutional reforms must continue to “promote exemplary practices and efficient coordination in the multilateral system.”

“The role of the IMF and the World Bank in ensuring global economic stability and shared prosperity has never been more important than it is today,” Dominguez said.

The G-24 was established in 1971 by the Group of 77 as one of its chapters, in order to help coordinate the positions of developing countries on international monetary and development finance issues, as well as to ensure that their interests are adequately represented in negotiations on international monetary matters.

Though originally named after the number of the founding member-states, the G-24 now has 28 members.

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